The Plan

The Plan

Over the course of the past eighteen months or so, JoAnne and I have read everything we can get our hands on, from how to sail, to how to anchor, to celestial navigation, to Bowditch and yes, I have read most of it now, for those who believe no one actually reads it! I have a copy on my Kindle DX, as well as a printed hard copy in a three ring binder full of notes.

Other things less related to cruising and more to finances have been harder to come by. There are a few authors out there who’ve done this before and have worked out the soggy details of finances for themselves with little information for those of us who are venturing forward to meet our dreams head on.

Without going into great details, I will state that we have been putting money into mutual funds and IRAs for many years. Somewhere, way back when, long before we reconsidered sailing for a life style, I expected to own a small house out on the prairie away from towns, and being paid for, owning a horse or two, a few chickens and some old equipment to plow and area and plant a garden in the summer time. I figured I could live on my military retirement money alone if I owned the property, and I’m right. The IRAs and other stuff is there as a helpful backup.

Now, we’re looking at selling the house and buying a new house – a boat.

Our “plan” therefore had to include what we needed to live, what we might get for our house, how much money is in the bank and my military retirement pay. Just a word about military pay. I spent twenty-six years in the United States Air Force and retired as an enlisted Non-Commissioned Officer finally in the year 2002. Unfortunately, I didn’t stay on active duty for all that time. I left active duty in 1989 and then spent the next few years in the Reserves.

For anyone familiar you will now realize that I’m not getting retirement pay and won’t see my first check until my birthday in 2017 – seven more years from now, when I am Sixty. Thus, that’s money I can “count on”, but I don’t have it available NOW.

Our “Plan” started to coalesce, albeit slowly. We realized that we own a lot of “stuff”. Things we’re not going to keep, need or use on a boat. Those things will be sold to fund part of our cruising kitty.

Our Home, as well, will be sold to fund the cruising kitty.

Since we have seven years for retirement, and our calculations show if we sell our house, pay off our bills we should be able to cruise comfortably for about six years, effectively we could sell the house now, pay off existing bills, buy a seaworthy old boat, outfit it and head out in a year or so.

However, if we push things back by a couple of years then we can save money for those two years. More money for the retirement fund AND the Cruising Kitty! Therefore, our retirement date was set for slightly over two years from now, February 2012.

The Plan then means we have two more years of savings aimmed at building the Cruising Kitty – which will include the purchase of the boat. The house becomes part of that and all our bills will be gone before the end of two years. Credit cards will be gone by the end of this month!

With a little luck, a lot of saving, and some penny pinching, we can cruise for our five years before retirement age sets in, the age of 60 for us. And we can do so in comfort, with a decent boat as well. By the time five years goes by we will have learned to be good sailors, we will have determined whether we will continue on with the cruising, or retire back to Colorado.

So – that’s the rough plan. Oh, and don’t worry, it’s mostly on paper now as budgets, savings plans and so forth. We moved all our funds under one group recently and we’re setting up a way to collectively monitor everything, control it, and gain access to it all making it easy for a cruiser in a foreign port to access his or her money when needed.

It CAN be done – though we can’t yet prove it, but we will prove it.

For all of those who say, “I envy you” – don’t, if you want to do it, plan it.

For those who say, “It can’t be done” – you’re wrong. It can. If people with less than I have can do it, so can you.

For those of you who say, “I wish I could do what you’re doing” – don’t wish. We had a saying in the military, wish in one hand… and… do something in the other (I won’t repeat it here, this is a family site!) and see which one fills up first. In any case, the hand you wish in won’t fill unless you, personally, actively take part in filling that hand.

In other words, don’t wish. Dreaming is fine, but putting your dreams into action is what it takes to make them come true. Dream all you want, but think the dream through, make it real, use your intelligence, your brain, your ability to plan and then make that dream come true!

It will take a PLAN. Start today. Even if you’re young and only a kid, start today. Don’t wait until you’re old like me. The sooner you start, the sooner you can join us out there!

Last week our daughter and her husband came over to help paint, and actually spent two days painting rooms and helping me. In all we painted three bedrooms, living room, dining room, hallway and some closets.

I finished removing the last of the carpets, most electrical covers and bought new covers, and switch and plugs.

On Wednesday last week the flooring was finished (for the most part, there’s some putty or something that has to go into nail holes, and a couple of boards need to be put in, and there’s a problem with the way the stair well was finished… but I think we’re getting them to fix that).

Last night I stopped in at the local Lowe’s hardware store and purchased three of the five doors that are left to hang. I’ll probably start working that tonight after work. That will leave the two upstairs bathroom doors. The three I bought are for the upstairs bedrooms (all the downstairs rooms are hung already).

I inspected the bathroom and new bedroom last night as well. The dry wall is up and the texturing is finished. It has to dry, and should be paintable tonight I think.

So… what do we have left to do?

Hang all the closet doors, two bathroom doors and three bedroom doors. Install vanity, sink and toilet in the basement bathroom. Paint basement bathroom. Install a few more light fixtures. Install all new electrical sockets, all new switches and all new electrical covers throughout the house. Install trim around new doors (after doors are up) and install new baseboards. The back yard needs work, and so does the front (waiting on warmer weather, no snow and no rain). I need to get a new guard railing up around the stair well, and a hand rail going down to the basement area, which is a problem because of the flooring as I mentioned above. They didn’t build it right and I’m not sure how to get around the problem without fixing the floor first. The contractors are on the hook for that problem.

If everything goes well I’m hoping to get the house on the market about 1 May or so. It might take a couple extra weeks in May depending on the details, and I need to get rid of a lot of computer and electronic junk in the basement so we’re thinking of having a garage sale.

I have a very nice Orion telescope (8″ reflector) I was considering leaving behind for my daughter to use with her kids, but they are all still pretty young and the telescope is not easy to set up for them if they aren’t trained. I might simply sell it.

Either way we’re on the down hill run now and things are moving pretty quickly for us; in fact it has moved so quickly we were surprised we could accomplish so much in a short time. I’m sore, I have cuts on my hands, fingers and bruises on my shins and knees, my back aches, I lost 8 pounds in sweat taking out carpets and I have no idea how many times I bumped my head on the ceiling climbing the ladder and forgetting the ceilings aren’t near as tall at home as they are at work!

All in all though, the house seriously looks much better than with old paint and chips off it, old nasty carpet that probably hasn’t been clean (you can’t clean carpet, be honest!) in years. And the house smells better (thank goodness! haha)

After living in the same place for 25 years, raising 5 kids, some grand kids, two dogs and two cats (not all at the same time) I can say that I’d rather not do that again… hahaha Don’t get me wrong, we love the kids, but we don’t want to raise any more. Downsizing has been a difficult thing to accomplish and though we still have a lot of junk to get rid of, we’ve gotten rid of TONS of stuff (we filled a 12 yard dumpster to the top and overflowing with ancient junk that we kept around for God knows what reason!) and we still have a lot of stuff in the basement and garage.

When you write up a business plan you essentially include everything you can think of that will help you create, modify and operate a business.

When we created our “Five Year Plan” we weren’t sure how we were going to begin and end the plan. But we did write down a vague, easily changed, very flexible plan for ourselves to cover five years time.

Thus far we have been flexible, we’ve had vague notions of where we’re headed and we’ve easily changed our minds on several subjects, several times. We even set our “retirement date” as of my birthday in August of 2012. I knew that wasn’t going to happen but needed a shoot-for date to make sure we were moving forward. That date has come and gone and I’ve erased it from the site here because it’s pretty much irrelevant now as will be any future date I might randomly set.

Instead we’ve moved forward with some very important requirements to complete this transition from working at our jobs day in and day out and getting out on the water as soon as humanly possible. I’m not a spring chicken any more, though I certainly don’t consider myself “Elderly” (like some people have called me recently, whom shall remain nameless, I’ll get my revenge on them eventually… muhahahaha). Basically though we needed to spend some money to get our house up to “selling” level. We lived there 25 years, raised five kids who’ve moved in and out a few times, multiple cats, dogs, tropical fish, grandchildren and some kind of science experiments which have lived in the refrigerator over time. Obviously when you don’t spend a lot of time being a “Ships Captain” at your home and let things fall by the way side in repair, you have lots of repairs. Fortunately, we don’t have to worry about the house sinking.

So, we’ve proceeded with new windows for the upstairs, we’re putting in hard wood flooring (because we’ve been advised by all these people who know better that we should, against MY OWN better judgement. Carpet, I believe would have been fine, but I digress). A bathroom which had fallen into disuse after the last of our kids moved out also fell into the shower. All of it. Everything, tiles, drywall, ceiling, you name it, I found it in the shower one day, thus, we’re having that rebuilt. Projects I started (tiling the basement floor) and never finished are getting finished.

We hired contractors to do the flooring, build a closet in JoAnne’s old office making it into a bedroom and the bathroom in the basement. The bathroom work starts next week. New windows went in already (not without issues, we have one broken window and I refused to pay the company until that is replace/fixed etc. They are already sending me a bill, and I called them up and told them that they would get the balance the DAY the broken windows are placed back into service). They are upset with me, and I warned them that if they keep sending me bills I’ll take other actions. They need to fix the window before their work is done. Sorry, I won’t play that game any more.

I have decided that I am going to hang new doors, removed the carpets in preparation for the flooring and I need to remove some paneling, trim, the vanity, toilet etc in the bathroom. I can handle that work, I just don’t want to lay flooring or build a new shower. Yuk.

Once this work is finished, along with the interior painting, we can put the house on the market. The outside of the house was painted in September, along with a new roof and new gutters.

Spent a lot of cash already. Ouch.

BUT the housing market is ticking up, and we’re adding/creating a “fifth bedroom” which OUGHT to increase the value of the house significantly if we can find a buyer. Either way, the house WILL be on the market soon – within a month or two at this rate.

The day we sign the papers and the money is in the bank is the day we will set our “retirement date”. We’ll do that to give notice at our jobs, give friends the change to visit, say good bye, have a party and buy us a beer or ten, and make our final plans for how much longer we have to work to build the Cruising Kitty up a bit more. At this point we’ve considered a small camper to pull across country to give us a place to stay while traveling (instead of spending on hotels) and will likely stay with our daughter for a couple of months (three probably at most) until we’re ready to go.

As to boats… we’ve looked at hundreds and narrowed down what we like and don’t like to a couple of rather widely different types. A 35-40 foot ketch is our first choice, because most have an aft cabin, center cockpit, and as a ketch we like the idea of shorter masts and slight easier-to-handle sails. We really would like a full or modified keel on such a boat.

The other type of boat is a cutter rigged Westsail 32. They have a full keel, and do not sail well in light airs, but are, from those owners I’ve spoken too about them, demons in heavier winds and sail well with heavier winds. They don’t have an aft cabin and are significantly smaller than a 40′ ketch would be. But these boats have sailed around the world and are considered good vessels for a couple like us, albeit a bit smaller.

It has occurred to us, based upon the size of our home that the amount of stuff you collect, save and store in your home is based on the existing amount of space available. In other words, if you have a place to put something, you’re going to fill it with stuff and most “stuff” isn’t always something that performs a function, has a use or even is worth anything. I know this personally, because I filled a drop off dumpster that was 8′ wide and 12′ long to the brim with ‘stuff’ which no one wanted, I couldn’t sell and I couldn’t really donate because it was broken, old, out of date or just plain ugly. So if we have a 40′ yacht I figure we will fill it and sink it in 3 years from “stuff” that doesn’t have a use. On a smaller boat, kept simple, sailed simply and without all the extraneous crap one collects over the years we won’t sink it as easily!

Seriously, there are plenty of advantages to going smaller, simpler and sooner than waiting around another 4-5 years while collecting enough money to buy, say an Island Packet 42 or a Westsail 42. Those boats, even used are well more than our budget will be able to survive. It might be nice to have one, but then we’d have to go back to work just to pay for supplies and water for a six month visit to the Bahamas, not to mention the money it costs “to get in country” ($350 USD for a 35+ foot vessel).

All in all, I think the “Plan” is going well. We still believe we will be able to do this on what we make from selling our belongings, vehicles and other toys. Others have shown they have “done it for less” in past years but money isn’t worth as much these days, so we need more just to get the boat, just to outfit and just to get out of Dodge.

But, getting out of Dodge is the first and foremost goal in our minds and I’m more than ready to get on a boat and cross the Gulf Stream again – this time on a vessel and not a plane and spend some time just relaxing and watching the weather, fishing and cooking what I catch, visiting places in the Bahamas for awhile. Once we get a good feel for the boat we might head back to the states to refit broken things and then head south down the Thorny Path – Though I’m a “follower” of Bruce Van Sant and I suspect I’ll chose the “Thornless Path”.

Obviously we want to retire and to a ship, a sailboat, in a warm climate.

But we’ve recently been not so much reconsidering but more re-evaluating things. Reevaluation of a plan is always a good thing when it helps a company or organization to reduce costs, expand the company operations, or improve profits.

In the case of retirement, folks are headed for a time in their lives when less or no income will be present than they are used to. In our case we know we’re considering living on from 1200 dollars a month to as little as 500 dollars a month. This is perhaps a high expectation of a low amount of cash. On the other hand, others are doing it and anything you can do, I can do better – assuming I know your methods, and you’re not as ingenious as I happen to be.

But, we are considering some slight changes in our plans. I figure we can sell our old, and smaller sailboat here in Colorado for a good price, but there’s always a second use for a 25′ sailboat. Trailering it across the country.

In other words, we have friends we want to visit across the country as we go, kind of a last hurrah-party trip. But we think we can pull our old boat, check out a lot of inland lakes enroute to the east coast and perhaps sail a bunch of these lakes, while visiting friends and treating them to sailing trips on lakes close to their own homes.

Why not?

Perhaps money. I suspect each state will have rules and regulations that will cost us something too, so we can’t just do it “for free”, but you know thems the breaks.

Anyway, we’re considering this travel mode and selling the old boat on the east coast. We won’t get as much money for her there as we will here in Colorado, but we will certainly get some more pleasure from her as a sailing vessel (and portable home/camper/cooking area/sleeping area) than we would if we just sell her. And probably save a lot of hotel fees enroute….

Hmm, might be a good name for a boat… but really, just what the heck is a “Cruising Kitty” you ask?

Most people probably know, but I’ll be darned if I knew before I started along this road. I knew a kitty was a slang name for a lot of things, but in particular a pile of money in a poker game, or the pot of money. The definition is also of a pool of money that several people might have contributed to.

In a cruising kitty, only one person or a couple in general contributes to the kitty. In this case, my wife and I. In the case of others, perhaps you have a crew of people who will be helping along toward the final goal. No matter how the money gets there, you can’t just “go” unless you have something to go on. My good looks won’t get me around the block (mostly because my wife nixed that idea before I could even voice it). On the other hand some people might be able to make money from their good looks – but, that’s for another article, in perhaps a different venue…. /grin.

So, how do you get a cruising kitty? In short, you SAVE MONEY. Put it away.

I’m going to tell you a story.

A long time ago a pretty young lass, and a handsome young military man got romantically involved. Pretty soon they were raising about thirty children (ok, it seemed like it sometimes!) and were spending money right and left just to feed the horde… er… tykes. Putting money “away” and saving it really wasn’t much of an option, and in fact, it was difficult to rub two pennies together before the month was over. Credit cards were a dime a dozen though, in those days, and gosh, you know the young folks just love those things.

They are soooo convenient, and easy to get, even if you don’t have a lot of credit you can get a credit card… damn them. And so our lovely young couple with the horde… er little tykes set out to buy things they needed, and all was good.

Until one day as the children had grown up from cute cuddly kittens into monsters and monstresses, and mommy and daddy discovered that while they did own a home, that every thing they owned was on on a piece of plastic and really and truly wasn’t “owned” by them. In fact, due to the massive credit card bills, Mommy and Daddy were now living home alone and still paying bills for things six years ago, long forgotten and probably broken by the Horde… er… beautiful children.

So, Mommy and Daddy, now old and gray (ok, not that old and only a little gray) sat down and started looking at something called a budget. “OH MY GOD!” exclaimed Mommy and Daddy in unison, and pointed fingers at one another, and gnashed their teeth and prayed for the the end of the world… but lo and behold, it wasn’t so bad as they thought.

After actually THINKING for a short time they came up with a plan to save money.

In fact, this is a true story and it’s not wholly accurate, but close enough for government work (more on the government later).

In fact, our hero and heroine actually learned many long years ago how to save and were actually doing it, slowly, but surely but we just didn’t do it as soon as we SHOULD have done so. We didn’t think about compounding interest and things like that, so bent on raising children and life in general we never stopped to look at our accounts or put away the credit cards.

Oh, and before I get beat up, the “cute little kittens that turned into monsters” are our darling children whom, for the most part are still lovely children. Thank God most of them have children of their own now and know what we went through… but… I DIGRESS. 🙂

Life comes at you fast sometimes, and once in awhile everything goes to hell in a hand basket and nothing you say or do can fix it. You have to live with it. Sometimes you make mistakes and you either go on, or you curl up and die. We chose to go on. We’ve stopped using credit cards for anything except we keep one active by putting a phone bill on it, so they don’t vaporize (might need it some day for a true, honest emergency).

On the other hand we still have bills and those are going to go away soon too. Trading a 5% home equity loan for a 29.99% credit card loan seems actually painless at this point. So credit cards are a thing of the past.

So, all you folks with your dreams out there that really “don’t have a lot of money” – think before you say that. Do a few things.

2) Pay yourself FIRST!!!!! Before you pay bills, set aside your savings. Set aside at LEAST 10% of it. Before you give the church (if you go, and tithe) GIVE YOURSELF YOUR SHARE. God won’t mind too much. I remember some saying about “God helps those who help themselves”. Help yourself FIRST.

3) Set up a savings plan. IRAs are good. Depending on your tax bracket, either a Roth (taxed now, no taxes when you can use it at 59 1/2 years old). If you’re higher income, use the traditional and help yourself to some lower income. (Put simply, it’s not taxable NOW, it goes into retirement and they tax it later when you start withdrawing it, as income…) But, SET UP SAVINGS!

3A) If you’re a kid, start an IRA NOW. Put as much as you can into it NOW. If you were 14 years old and could save 2000 dollars a year into an IRA, by the time you’re about 65, you will have roughly 2 million bucks in there. Won’t have to work at Walmart, now will ya?

4) Don’t get expensive phone plans, internet services, cable, Sirius Satellite Radio – all those damned toys. Buy a JUNK CAR for the love of Pete. (Remember, you want to SAVE MONEY and BUY A BOAT… and start a Kitty!)

Oh- back to the Kitty. The Cruising Kitty is the pot of money on which you will rely for the buying of your boat, your various fees, food, and the things you will really require to sail with.

Your cruising kitty can start growing while you’re young. If you’re a teen, start now! Don’t wait til you are old like me. It’s a lot more difficult now than it is if you’re a youngun.

For the rest of you – let’s assume you were smart and started that IRA, 401K or some other plan. Leave it alone. Figure out how many years you want to sail for, then work up a rough guesstimate about how much money it will cost you to live month to month. Think about whether you will anchor out a lot, get a slip everywhere you go, and remember there will be fees everywhere you go outside of the United States (and inside as well – that darned Government, again!)

Once you get your rough guesses together, add something to it. Make up a number. Twenty Percent is a good number and add that number to it. Now, you need to figure out how much a boat is. Wow. I can’t help you there, I’m still figuring that one out. I’m shooting for a “boat budget” of 50K and 10K outfitting. That’s 60,000. That’s a lot. There are boats out there a LOT LESS and a LOT more. You chose what you want, figure out if it is REASONABLE. If not, then keep looking.

Add that number to your kitty. That’s it, that’s how much you need. I’m looking at a lot of money because I don’t want to do massive work on a boat. I want to get it, do a bit of fix up work, outfit it with the equipment I want and go. That’s it.

The difference between me, and most of you though, is I know I start drawing some retirement pay at the ripe old smelly age of sixty. That’s not long for me. I can cruise on the money I’m setting aside for about seven years (give or take a year), plus emergencies, plus other things. Then I can continue on my retirement pay, plus I have my savings to draw on, which isn’t counted as part of the Kitty.

Finally… Oh, I bought a house. Long time ago. Twenty years ago. That is a lot of my Cruising Kitty right there. Not keeping the house, won’t need it when I get a boat. I WILL need the money I put into it, minus an amount for a home equity loan to get rid of those damned pesky credit cards.

Once they are gone, I will breath much, much easier.

That’s pretty much all there is to it.

A Cruising Kitty is a chunk of money you’ve scrimped and saved, and shoved away in a bank, high interest account (if you’re young, and you can afford to LEAVE IT ALONE! If you’re older, play it SAFE PLEASE) and you’ve stopped spending money like it was going out of style (ok, well it IS going out of style, which is why you want to SAVE IT!)

Back to the government. Now forgive me for what I am about to say, but, perhaps it will sink in to some heads out there some day… Maybe a lot of you voted for Obama, and Change! Good for you. You’ve helped to push America even further down the road that the Roman Empire trod upon many centuries ago. The Decline of Rome didn’t happen because of war and pestilence. It happened because of the greed of politicians, avarice, you know, that sort of thing.

There’s nothing wrong with companies making a profit in my humble opinion, mine does, and they give me bonuses too! Nice, I get paid. The government doesn’t pay me. I pay the government to stay in business. In fact, they government TAKES from me to remain in business. The business of the government isn’t to “make change” it’s to “take change”, all of the change in your pocket. Didn’t you ever stop to think why we pay taxes when you go to the store? So they can collect up all the change in your pocket!

I’m sorry for waxing politically here, but the government is trying to keep you from getting on that boat and cruising. They want to do everything in their power to keep you at work, happy, quiet and working your rump off to give them all your change (plus some). Don’t LET THEM!

Start voting with a conscious. The government doesn’t make jobs, as evidenced by the past year. This country has lost a LOT of jobs and a lot of it was due to the hike (on the order of trillions of dollars) to create programs, give away money (YOUR MONEY, MY MONEY) to people who didn’t deserve it (You know, those ‘evil corporate dudes’). Don’t get me wrong, corporations are great things. They put people to work, but FAILING COMPANIES SHOULD FAIL!

The only bailouts should be sailboats that need it. You may, or may not agree with the foregoing politics, but that’s my opinion – and I’ve worked for the government, both INSIDE and OUTSIDE the White House in my lifetime, and for the military, and saw spending that was reckless. Oh, wait, it’s STILL going on even now…. Ok, politics button off.

If you want to realize your dream my friends, Liberal, Conservative, Libertarian, Socialist, it matters not what your politics be – what MATTERS is that you pay attention to your pennies and the dollars will care for themselves.

I’ve giving the advice I ought to have taken nearly a half a century ago and I’d certainly, without a doubt be a millionaire now, of my own hard work. I didn’t, now I’m struggling to get a five year plan to work in two years.

But… take heart. If *I* can do it, you can do it in five. And the youngsters out there, you can do it in 10, 15 or 20 years. So if you’re reading this now as a child of say 15… SAVE YOUR PENNIES!

Best Wishes friends. Start building the Kitty NOW and you’ll sail soon!